Entrepreneurs and Business Owners

Guide to the Law for Business Owners and Entrepreneurs in the United States

There are many laws and regulations for businesses in the U.S., so this is just a starting point. Here are the basics, which generally apply throughout the country, but states also have additional specific laws (Check out our guide for California businesses). Also, certain industries have additional regulations to follow. So, as usual, it’s best to speak with a lawyer to discuss your particular business issues.

Get the new book for small business by Law Soup Media founder Tristan Blaine!

1. Small business and startups vs big business

When is a business a small business or startup, and does it matter?

See our Guide to the Law for Small Business and Startups.

Is freelancing considered a business?

Yes, generally freelancers are their own business, unless they are being misclassified by the hiring party.

See more at our Guide to the Law for Freelancers.

2. Business structure and set-up

What is a business structure?

A business can operate in many forms, including a sole proprietorship, general partnership, corporation (S corporation and C corporation), limited liability company (LLC), or other types.

For more information, see our Guide to Business Structures.

Do I need to register my business?

“Registering a business” can mean many things, including getting a local business license, or EIN, etc. See our full Guide to Business Licensing & Registration.

What is a social enterprise?

A social enterprise is a type of business that operates based on both “doing good” as well as making a profit. See our Guide to Social Enterprise for more.

How much does it cost to form a business structure?

Most lawyers would charge between $500 – $2500+. Rocket Lawyer usually charges around $100 (+ state filing fees).

Do I need an office or physical store? Can I use a mailbox service or virtual address for my business?

Many home-based businesses use a mailbox service or other mailing address in order to not have to disclose where the business owner lives. A business generally may use a physical mailbox service (e.g. UPS Store) or virtual mailbox service for many business purposes, including the public address it shares with clients and customers, and for most government filings. See Why Your Business Needs a Mailbox Service.

If you are looking for a virtual mailbox, we recommend the service we use, iPostal1. Since we signed up for iPostal1 mail services, we have saved SO MUCH MONEY, and we love the convenience of being able to get a scanned copy of our mail no matter where in the world we are! Great for small businesses. Plans start at just $8.33 per month.1NOTE: Law Soup Media may receive compensation from this vendor if you use any of their services. Thank you for your support!

3. Hiring for your business

Should I hire employees or independent contractors (freelancers)?

Determining whether to hire an independent contractor (aka freelancer) vs an employee can be quite tricky. While using independent contractors will usually help you save on taxes, benefits, and administrative costs, many employers misclassify (whether intentionally or not) employees as independent contractors, which can have serious consequences.

See our guide to Freelancers vs. Employees.

What are the general employment laws I should know?

See our Employee rights page.

What intellectual property rights should I be aware of when hiring?

If you are hiring a freelancer to create any intellectual property (writing, art, design, etc.) for you, the freelancer actually owns that intellectual property unless you have a signed contract stating that you will own it (work for hire or assignment agreement). If not, you would simply have a license to use the work. See Copyright for more details.

If you are hiring an employee to create intellectual property, you generally will own the work as long as it is clear that they were hired specifically to do that work.

4. Taxes & Accounting

How do taxes work for a small business? 

As a small business, you actually must pay taxes 4-5 times per year, not just once! See more at our Guide to Business Taxes.

Is a certain type of accounting required?

Generally, small private businesses are not required to do any particular type of accounting, except that S Corporations must generally use a calendar year for their fiscal year (Jan 1 – Dec 31). Companies that are publicly traded must generally use GAAP (generally accepted accounting practices) accounting.

Get free accounting and invoicing tools with Wave.2NOTE: Law Soup Media may receive compensation from this vendor if you use any of their services. Thanks for your support! See our full review of Wave.

 

5. Business Name & Product Name

Can I protect my business name and prevent others from using it?

Maybe. If no other ongoing business used the name before you did, in the same industry as you, you may have rights to your business name. This is called trademark rights. See our Guide to Trademark Law for more.

How do I protect my product name?

If no other business is using a similar name for a similar product, you may be able to get a trademark for it.

Can I name my product after a celebrity?

Generally, not without the celebrity’s permission. For example, without getting proper authorization, you can’t call a new dress the “Marilyn Monroe dress.” This is based on the right of publicity. See more at our Guide to Marketing and Merchandising.

6. Business Ideas and Materials

How can I protect my business ideas?

Business related ideas may be protected through a combination of patent, trade secret and/or copyright. These are all different forms of intellectual property. See our Guide to Intellectual Property for more.

7. Retail and E-Commerce

See our Legal Guide for Retail Businesses, and our Guide to Laws about E-Commerce.

8. Business Contracts

All businesses need to have a basic understanding of how contracts work. See our Guide to Contracts for more.

9. Business Banking

Does my business need its own bank account?

It’s always a good idea to separate personal from business expenses. If an LLC or corporation, the business must have a separate bank account, otherwise you risk losing your limited liability.

To set up a business bank account online very quickly and easily, we recommend getting a FREE checking account from Novo.3NOTE: Law Soup Media may receive compensation from Novo if you sign up for their services. Law Soup Media banks with Novo, and we love how digital-friendly it is!

See more at our Legal Guide to Business Banking.

10. Other business law

You should also be aware of licensing & permitting requirements, consumer rights, marketing regulations, particularly on the Internet, and other general law (see all Legal Guides).

Also be sure to check your state and local laws. For California, see our Guide to the Law for California Business Owners.

Info for specific types of businesses:

Recommendations

  • Get the new book for small business by Law Soup Media founder Tristan Blaine: Do it Like a Boss: What Every Small Business Owner Needs to Know About Law and Taxes
  • Check out Rocket Lawyer4NOTE: Law Soup Media may receive compensation from Rocket Lawyer if you use any of their services., which provides affordable and simple legal services for business & much more.
  • Get free accounting and invoicing tools with Wave.5NOTE: Law Soup Media may receive compensation from this vendor if you use any of their services. Thanks for your support! See our full review of Wave.
  • Small business banking: We use (and love) Novo, a FREE online checking account for small business that is super easy to set up and use!6NOTE: Law Soup Media may receive compensation from this vendor if you use any of their services. Thanks for your support!
  • Get a mailing address for your business: Since we signed up for iPostal1 mail services, we have saved SO MUCH MONEY, and we love the convenience of being able to get a scanned copy of our mail no matter where in the world we are! Great for small businesses. Plans start at just $8.33 per month.7NOTE: Law Soup Media may receive compensation from this vendor if you use any of their services. Thank you for your support! See Why Your Business Needs a Mailbox Service
  • See more at our Small Business Resources page.

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